Oil stocks hit by fading diesel hike hopes

Reuters Market Eye – Shares in India’s state-run oil exploration and refining companies fall on media reports the government is not likely to raise prices of diesel in the near term.

Investors had been hoping the government would raise diesel prices soon after the presidential election to reduce the fiscal deficit and lower its subsidy burden, which is also shared by state-run oil companies.

* Times of India reports the government is unsure of whether it can push the diesel price hike before Parliament’s monsoon session scheduled to start on August 8.

“Government don’t have a political will right now, and are little reluctant to go ahead with a hike in diesel price, considering high food inflation,” said Ashutosh Bhardwaj senior research analyst at brokerage Nirmal Bang.

Shares in Oil and Natural Gas Corporation fall 1 percent, while Indian Oil Corporation declines 0.6 percent. Hindustan Petroleum Corp is down 1 percent, while Bharat Petroleum Corp loses 0.8 percent.

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